Impact of internal control on the performance of non-financial listed firms in an emerging country

Abstract

Internal controls play an important role in any firm since they help achieve both financial and non-financial performance. Internal controls are designed to minimize risks, protect assets, ensure reliable financial reporting, increase performance, and facilitate compliance (Bashaija, 2022). This study is conducted to investigate the impact level of internal control on the performance of non-financial firms listed on the Vietnam Stock Exchange. Data were collected through a survey questionnaire with 506 survey questionnaires from listed non-financial firms. Quantitative research methods are applied to evaluate the impact of internal control on performance. The results show that internal control including five components has a significant impact on financial performance, and components of the control environment, risk assessment, control activities, and communications have direct positive effects on non-financial performance. Monitoring activities have no impact on non-financial metrics. Besides, the study also shows that non-financial indicators directly influence the financial indicators of listed non-financial firms. Based on the findings, some recommendations are proposed for enhancing the performance of non-financial listed firms.